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stay in paris when you go there. congratulations and it's amazing to be able to pull it off. we want to thank you this was awesome. nathan, thank you as well. >> go out and get the book. >> yeah. >> and show it one more time, we got three seconds. >> thank you so much for being here. come back and join us again. that does it for us today. make sure you join us tomorrow. it's time for "squawk on the street." ♪ because i'm happy hop along if you feel like a room without a roof because i'm happy clap along ♪ >> good tuesday morning welcome to "squawk on the street" i'm carl quintanilla with simon hobbs and david faber at the new york exchange. cramer is off today. futures are a little happy today. some bounce after vladimir putin deescalates the ukraine situation saying he sees no need for military action, has no plans to annex the crimean peninsula. the bulls will take it. the ten year has been a fear gauge you saw it above two six and europe is trying to get back what it lost yesterday, gold is also down about $13.
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the roadmap begins with the markets looking to rebound as tensions in the ukraine ease at least for the time being. gold pulling back from that four-month high. however, putin still calling the situation in ukraine an unconstitutional coup, we'll go live to kiev for the latest developments from the region. and shares of radioshack dropping almost 30% in the premarket after the company announced it's closing 1,100 underperforming stores. but we'll begin with the markets as we said trying to rebound from the selloff yesterday despite the turmoil in ukraine, futures in the u.s. and shares in europe pointing sharply higher following reports that vladimir putin has ordered his troops to cease military exercises along the border with ukraine. his argument was that those had been in the works for some time. obviously there's suspicion around everything he said, but for now it looks like an escalation is maybe off the table for today. >> no need for military action is the -- i think the standout quote for that and as you said the markets have come back
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strongly. yes, it probably was. the whole pont he must have planned the whole thing in advance. you can't mobilize that number of troops so quickly. that's underlying what we've been witnessing. >> there's still the financial aspect of all of this. the white house trying to get some financing for ukraine for all those households that are going to be vulnerable no matter what, and the secretary of state in kiev i think he speaks around 11:00 a.m. eastern time and we'll get a sense whether it remains sort of a military crisis or more of your run of the mill emerging market financial crisis. >> for investors here it seems as though it's passing fairly quickly at least in the terms of the near-term worries and we'll see if it emerging in a more significant way as it did yesterday, but it's interesting how quickly these things can come and go at least in terms of how they overshadow anything else in the minds of investors. >> but to be clear the main fear was the financial conditions would worsen in russia. the fact that putin has stepped back means you don't have the big sanctions, it means you
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probably don't have further capital flight. that's what is important that russia holds together. the big takeaway from vladimir putin's news conference is that there is no need for military force in the ukraine. let's see how that is playing on the streets of kiev now, cnbc's steve sedgwick joins us live from there. are the tensions notably diminishing, steve? >> reporter: well, simon, president putin we all watched that speech in kiev and we were all wondering where he was going to go with this one as well, what is the difference between a russian force and pro-russian force and i ask it rhetorically and a lot of people don't know, either russian forces or pro-russian forces are in the cry mooia, if he is saying there's no need for military force in ukraine who are the guys in the south of the country? it seems from the observers down there from the military plates on their armored vehicles that they are very much russian forces as opposed to pro-russian forces. there's a risk today as you were saying as well and the concern
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about putin reserving the right to use force i think is a veiled threat given the fact that he said force would be a last resort, a lot of contradictions there. let's give you an update on the avenues as well. small standoff between ukrainian unarmed troops who tried to retake their air base. they were turned back by russian or pro-russian forces. a couple of warning shots were fired but it was quite a low-key incident. elsewhere gazprom saying it will raise prices for the ukraine. yankovic had negotiated a discount when he turned to russia in november, and now the price is going back up to the previous price and that is tough for this fledgling regime here as well. they are saying over at gazprom because ukraine hasn't paid its bills. others are saying it's another political tool being used by the russian government to put pressure on this pro-western ukrainian government. mr. kerry is in town as well.
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and officials traveling with mr. kerry said the administration will work with congress to give a billion dollars in loan guarantees plus offer technical assistance, assistance making sure that the election coming up on may 25th meets with international standards, plus help in combatting all kinds of issues including crumbation. plus the imf talks are still ongoing and perhaps early hopes for imf money in ukraine may be dashed. it could last a little bit longer. goes, i'll hand it back to you. >> busy day for you, steve, we'll come back to you later on. want to look at the markets in light of the situation in ukraine and looking ahead to jobs friday. and chad, good to see you today. >> good to see you as well. >> obviously you can't take your eye off of that boiling pot as the secretary of state, of course, lands there. but does this give us more room to think about jobs on friday? >> yeah. absolutely indeed. this was basically a -- the ukrainian crisis is a thunderstorm that just rolled through the markets but we do
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believe that the economy here in the united states is firm footing. yes, the first quarter was gradually decelerated from the past several quarters. but we believe in the second half of the year that you're going to start to see a reacceleration. the jobs numbers on friday, though, will be somewhat more muted than expectations. but we believe that that's more weather related. >> yeah. so, what will that look like? are we talking -- are we into triple digits? is it 100 plus, 150. what's aggressive? what's not? >> i think you're going to be in the triple digits. you're going to be in the mid150 range which bodes well for the economy. we're continuing to improve but nonetheless, i think what will occur here when you get into april, may, and june after the great ice age of 2014, you're going to start to see better numbers. and that's going to really bode well for the broader economy. we're looking for economic growth around 3% for 2014. >> chad, stay with us.
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let's bring in allen, he joins us editors of "the land's letter." what's your view of the markets at the moment? >> well, you know, i think it's kind of falling in place to what we were thinking at the start of the year, sime beon. the companies that did well, the high fliers in 2013 have really underperformed when you look at companies that tripled last year like best buy, supervalu and companies like that. they're all double down double digits. i think it's an area where the market got ahead of itself the fourth quarter last year and we're getting more of that back-end filling this year. it's time to be a little bit more selective but i still think the upward trend is going to be intact just not as significant as last year. >> and what will work, allen? what do you increase your exposure to in your view if you believe that the market's still going higher? >> you avoid the high fliers. i think tesla's the only one
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that, you know, did really well last year that's continuing, so instead of playing that gamble, you know, i'd be more preservation of capital oriented, simon. i would look at things like bed bath & beyond, coca-cola, things hitting new lows that are high quality that will go up whether the market goes up or down. >> chad, you, too, presumably have been rebalancing. what do you believe will work now? >> i believe you go up the quality spectrum. you look at blue chip companies. you can look at companies like aetna or anheuser-busch or walmart. i would be a little bit more cautious in regard to perhaps the long end of the yield curve. i think we'll get over that 3% number on the ten year going into the second half of the year. and what we would also do is perhaps lighten up on emerging markets at this inflection point due in part because we think that the federal reserve will continue to weaned down their asset purchase program. so we want to be a little bit more selective in that vein. >> and finally, chad, the
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president will unveil his budget today. we're already seeing all the routine curtain raisers in the newspaper about the collision course he's on with paul ryan. do you think d.c. political risk is going to be a factor through the rest of the quarter? >> no, i don't indeed. matter of fact, i don't think there's going to be a fiscal drag on the u.s. economy in 2014 or in 2015. i think both sides of the aisle more or less, i know it's unpopular to say, are going to hold hands and sing kumbaya and i think it will bode well for the financial system and in particular for the equity markets. >> we'll see what happens. guys, thanks for getting us started this morning. when we come back as we said radioshack tanking in the premarket. we'll tell you why and what it means for retail as a whole. and also ahead former senator barney frank will give us his take on the ukraine and how it's affecting us at home. it is mardi gras tuesday. and maybe we'll put back a couple of hurricanes if futures stay this good.
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we're back in a moment. tall the building is, or how ornate the halls are. it doesn't matter if there are granite statues, or big mahogany desks. when working with an investment firm, what's really important is whether the people behind the desks actually stand behind what they say. introducing the schwab accountability guarantee. if you're not happy with one of our participating investment advisory services, we'll refund your program fee from the previous quarter. it's no guarantee against loss and other fees and expenses may still apply. chuck vo: standing by your word, that's what matters the most.
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radioshack tumbling more than 20% in the premarket after it announced its closing 1,100 underper fortunatelying stores about 20% of its footprint. the struggling retailer also reporting a significantly wider
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fourth quarter loss. the company said it will have 4,000 store locations. of course, radioshack has been under pressure for years now with the likes of competing with best buy and then, of course, with that category killer amazon. the company has started to try to refurbish and change merchandising at many of those stores. it apparently did not go as well as perhaps hoped for during the holiday season and we are seeing the stock down sharply. >> they refinanced at the end of last year and the suggestion is part of that refinancing might have been the condition that they close down stores, though, arguably the market expectation was half of that, 500 stores and not 1,000. >> liquidity is around half a billion and cash on hand is 170 something, cash on hand. my favorite stat was dennis berman in 2003 them and amazon had $5 billion in sales and now amazon has $75 billion and
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radioshack has 3 1/2 billion in 10 years. >> if you are a hard goods retailer, competing with amazon is very difficult. we saw a great resurgence in best buy that the new ceo at the time did. but it never stops being really hard. for radioshack it continues to be quite difficult. >> and for the liquidity position the added cost of shutting down the stores become significant. >> it's not the first time this has been on watch for and/or liquidity and its concerns about solvency and its ability for being a going-forward entity. it may happen again. >> they'll still have 4,000 stores, but if it is 1,100 that they cut, that's a fifth of their foot present. but others say, look, i've been predicting the death of this company for the past five or six years and hasn't happened yet, so maybe the zombie companies
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that treasury secretary summers mentioned not too long ago continue to exist. >> they can. i'm amazed at the different levers that company can pull to survive but not thrive. look at jcpenney they are continuing as we look at radioshack, jcp are continuing to surge higher when we talk about troubled retailers. up again. a huge short position in jcp, what are we talking 148 million shares short, but you do have at least this idea that they're stabilizing. their financial profile is stabilized if not improving a bit. you've got -- you've got that actual -- actually being said this morning by s&p which the ratings outlook was revised to stable from negative on what they are calling that modest fourth quarter improvement so your rate of change is actually going the right way on jcp. >> seven notches below investment grade. >> is that all it is? >> seven notches below.
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steve sadoff ex of macy's is on the show later. >> sachs. >> there's a suggestion that he might replace the ceo later. >> that's why we get the 20% pops when the news is not absolutely horrible but mildly horrible. >> the volatility in that stock is astonishing at times and it has been over the past couple of days. we're talking about a stock that was five bucks not too long ago and now pushing nine. we'll see. up next should you attempt to ride the market volatility or stay out of the politics. art cashin will be up next. yesterday we lost 154 points and we'll make it up today. more "squawk on the street" from the nyse straight ahead. ameriprise asked people a simple question: can you keep your lifestyle in retirement?
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11 minutes until we open and it look as though it will be a sharp bounce at the open erasing potentially yesterday's losses. let's bring in art cashin. good morning. >> good morning. >> do you trust what putin says? >> temporarily for the next 24 hours, yes. but i think he probably felt betrayed. you know, when they cut the deal back in late february for the demonstrators to sign off and for the ukrainian leader who was
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essentially a puppet of putin and then the demonstrators went back on it within hours. so, whoever putin thought he had a deal with didn't stand up to it. >> meantime does it matter if russian troops are in crimea, from a market perspective? >> not unless something develops from that, okay? if it becomes a nose-to-nose, a good deal of what we saw yesterday was when there was reputedly an ultimatum to the ukrainian troops in crimea to put down your arms by 5:00 a.m. tuesday and that's what helped spook the market. that seems to be a stand-down. i don't think all of this is going to go away. i think putin may take to the streets aiding and abetting pro-russian demonstrations in the cities. that i don't think will be a market factor. none of it will count. they came very close to what they thought was military and if that's not going to happen there's a sigh of relief. >> so, what's the fear gauge
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now? do you watch the ten year? what takes our temperature? >> you got to keep watching the ten year. that was clearly there. you'll see at least according to early indications that european markets are not going to regain everything they lost. >> nor will gold lose everything it got yesterday. >> there is i think a certain amount of suspicion and cynicism built into what we're seeing. >> they are saying actually given the run we've had, for example, on the dax this is an appropriate adjustment. it's not a full correction. it's, you know, we're still going upwards. >> you think this would have happened without the ukraine? >> i think they could correct for any number of reasons. >> of course, they can. but i think the fact that you don't regain as much as you lost indicates that there might be some suspicions. >> putin's probably just cranky he wasn't at the top of the "forbes" list. >> if it wasn't that, it was the hockey loss. so much to be angry about. >> he's probably the world's
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richest man. >> the feeling on the floor was it is the olympic hockey loss. >> we shouldn't kid. but obviously his power is great within his own country. >> but you are not kidding he's at the top of the "forbes" list. >> that is talked about a great deal, but very quietly given -- and particularly in russia. >> from a policy standpoint, art, where does the white house go? loan guarantees and let it sit? >> well, they have to walk a little bit of a fine line. they can do loan guarantees, but if they overreact, if they look like they are taking ukraine into their full embrace, that will reignite things. in all fairness we have a monroe doctrine that says no foreign operations on either american continent. and i think putin's a little afraid that the country right next door to him might have an undue influence what he sees as still the nato powers. >> he has certainly demonstrated or reminded people what a nat
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gas choke hold it is, right? how pivotal it is to his trade union versus eu trade union. we're not done with the story by any means. >> there's no way we're done with this story. this will continue. >> it interesting the role that natural gas plays in geopolitics and the export from this country eventually could also play a role and/or lessen putin's power. >> but here it's liquefied natural gas and western europe is hardwired into it, they just turn the taps off. >> they can't get it from the mideast it's not coming here anymore? >> and you have the new potential find off israel, so that -- so he's got to make the most of his oil and natural gas reserves now before prices change. >> in the meantime, a higher open. art, thank you very much. have a great day. all right. the opening bell's just a few minutes away. "squawk on the street's" coming right back after this. ♪
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a lot to watch, of course, as we told you at the top of the hour what vladimir putin said. apparently deescalating for now the situation in ukraine and that is giving futures some life. keep an eye on ge today. the company just filed notice that their ceo jeff immelt has put his entire cash bonus for 2013 $2.7 million cash into ge stock. so far this year he's bought 145,000 shares. that's $3.6 million. now owns 2 million shares and that is apparently one of the biggest buys by an insider ceo of the s&p 500 over the past year. maybe. except for richard kinder at kinder morgan i'm told. in his letter to shareholders says i'm investing right alongside you. >> and has held those 2 million shares since he became ceo. it's funny, he's a longtime ceo is mr. immelt at 12 years and counting. almost 12 1/2 years at the helm of ge. we've seen the stock trade at 45
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times earnings. be almost $60 a share. 9/11 hit right after his tenure began as ceo. the company has not seen anything like those numbers since. dropping as low as $6 a share in march of 2009 if i recall. >> in fact, march 9th the anniversary of 666 is this sunday. >> we had the ceo keith sharon on "squawk box" as we revisited so many of the worries that we'd had a few months earlier that perhaps this whole thing is coming crashing down to sort of paraphrase george w. bush and it didn't, and the stock is obviously up now. but can the unit operate better together than apart. you don't hear activism with ge very often. but it's out there and i've had those conversations. it's an enormous company but it's certainly something they are focused on. it's interesting that he's putting his money where his mouth is. i do still wonder if you wont see something if it doesn't
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start to really pick up in terms of stock performance. >> that would be interesting. i wonder if the dynamic, icahn taking on a market cap the size of apple means that ge is not immune. >> it started with ackman and p & e this idea that activists would own really what is a small percentage of the companies could still conceivably be taken seriously when they come with big proposals for these companies and we see it all the time. peltz and pepsi. >> but boards act to anticipate that. >> more and more. >> that's why we have this huge returning of cash to shareholders and huge stock buybacks that's the symptom of an activist stalking. >> apple cfo peter oppenheimer going to step down and retire from the company at the end of september. sorkin this morning said he's joining goldman's board which is also interesting. >> that was yesterday that he joined the board of goldman. >> the new cfo, the vice president of finance for apple. and as jon fortt indicated, a
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lot of context in the release today to make sure people didn't get the wrong idea about why he's leaving. >> right. but a long-term cfo. >> those are important jobs, make no mistake. particularly when you have 142 billion in cash. >> there's a look at the opening bell and the s&p at the. t topof your screen. and over at the nasdaq, the israel dealmaker summit a day after netanyahu paid a visit to the white house. just i guess we mentioned at the top might as well keep our eye on radioshack. we've made the point here at the table market cap doesn't make it a news worthy name but rather the brand and the broad recognition of the name, right? >> and that continuing focus on retail with jcp as well. that's -- and do watch hilton as well. we got a buy upgrade from -- goldman came up with a buy
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upgrade on hilton yesterday which is something of a contrarian call. they're talking about the clarity with which it's using its cash. a big disappointment in lodging that some of the hotel chains are decelerating their return of cash to shareholders. they are saying that they're going to pay down debt clearly because they still have the blackstone state that huge blackstone stake. we've got some sound here from the ceo of hilton. >> i think it's a pretty modest impact overall. obviously impacted january, a little bit of february. but february's ending up being a pretty strong month. we think march is going to be quite, quite strong. >> asset light, of course, in timeshares is also what goldman is talking about and also they are saying since the ipo hilton has lagged its peers and they believe it could catch up but i think it's slightly controversial because, of course, hilton was priced quite fairly at the start. >> although they are going to add 200,000 more rooms.
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>> they do have the largest pipeline in the hotel industry, 60% of that is offshore, but you also have to concern yourself with the quality of a lot of those additions which are more franchises than full-service hotels. >> as the industry has been trending. >> indeed. >> as we mentioned many times, though, a success story for blackstone which continues to own a good bit of the company. we were just referencing the times in 2008 and 2009 certainly back then, simon, one would have expected it not to be a win. >> to refinance the gdebt and keep the stakeholders happy. >> they had floating rate debt that helped them a great deal through the crisis. possible there's a look at blackstone. got the numbers on the what the private equity oligarchs i like to call them made this year. man, those are big numbers. >> oh, my gosh. >> insiders selling for the first time. very small percentage of their shares but that hasn't happened yet. >> most of these companies are public. carlisle, blackstone, kkr, if
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you go through, they are. apollo. and even public entities. >> wilbur ross is selling their stake in bank of ireland that they bought at ten cents a share and they've almost doubled their money in that from 2011. that's actually happening the bank of ireland is depressed as a result. >> so, with all of this, dow's up 177. we're back to 1865. reversing yesterday. the breadth if i had this right only a handful of names are in the red on the s&p. >> it's a mirror image. >> very much a mirror image of yesterday. watch tesla today as well. shares are rising. the company says it will expand its super charger network away 2015. elon musk said we expect you to be able to travel almost anywhere in europe using only superchargers ahead of the geneva motor show. plans to introduce a right hand drive vehicle in the uk for the coming months which only simon at this table can drive.
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>> yes. and not here conversely. you drive on the left, of course, in the united kingdom. >> i did want to reference shares of safeway, swy which is a company that i've been following lately. you may recall a couple weeks ago we told you that it was in talks to potentially sell itself. it came out and confirmed that not long after we reported it on cnbc. the stock up 38.44. the talks continue at this point. they are focused as we've reported with private equity but kroger's name continues to sort of be around it. it's not clear to me based on my reporting at this point whether kroger is trying to get a seat at the table or simply position itself for what might -- might be -- some sales of stores that take place after a deal, if a deal is done. but this is near term in nature at this point on safeway. although frankly getting towards a price at least that many had anticipated would be very close to the buyout price were it to actually hit.
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so, wonders risk/reward on that name at this point but those talks heated at this point but kroger sort of a question mark. did want to three that into the mix. >> we're going to talk some disney dish in a little bit. you want to save it? >> yeah, let's save it for the faber report. >> i was just saying great week for iger. oscars, ratings at a ten-year high. "frozen" makes a billion dollars and now you do this with charlie urgen. unbelievable action on disney. >> the stock being up number 2%. >> autozone beat by seven cents. we talk a lot about the effect of winter weather on the automakers and some of the suppliers. actually their argument is that it was the winter that helped drive sales of reef placement parts as you know what potholes are like in this country and what winter weather does to a car over time. >> what salt does to tarmac. who knew that it would be so devastating in a city like manhattan? can i mention delta? it's one of the top gainers
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today. it said passenger traffic improved 2.4% in february from a year earlier which seems amazing when you think of all the bad weather effects they had there and the warning we had from united and continental on friday, a revenue warning as they had four times the level of cancellations this year in the first two months vis-a-vis last year. let's get over to the nasdaq and see what sheila has for us. good morning, sheila. >> good morning, simon. we're seeing the bounce back play out as here in the nasdaq as well. you are talking about the breadth of the rally, here at the nasdaq 100 only 2 stocks out of 100 are in the red so we're seeing the broad-based rally in the market. take a look at the russian tech stocks. this is interesting. they were down double digits yesterday. today some of the biggest winners on the index. speaking of large cap tech we are seeing leadership there as well, qualcomm is holding its annual investor today, boosting its dividend by 20% and giving
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itself a leeway to buy back an additional $5 billion in shares. nasdaq we always talk about a lot of the high-flying momentum stocks take a look at the 3-d printing stocks, they have been reporting earnings and generally coming in good, and 3-d systems and two other winners on the positive earnings a lot of good news at the nasdaq. adam parker at morgan stanley said tech even at some of these valuations still a buy. back to you guys. >> thank you so much, sheila. >> let's get to bob pisani on the floor and see what's moving. >> mr. putin said the military exercises are done, we've reversed all of the losses we had yesterday so take a look. europe is all up nicely. all the big youreuropeyour roeus are up and all the flight to safety trades we saw yesterday are reversing. the dollar, gold, all to the downside. treasuries generally are a little bit weaker as well. you can see there, the vix
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futures are all down today, so we were up around 16 on the vix yesterday, that's come down to 14 where it was a few days ago. emerging markets are all stronger even the russian stock market has bounced back and a lot of people were debating whether geopoll tibbs or economics really mattered to mr. putin. it's not clear what motivates him but if you put up the list of factors that are affecting russia yesterday, selling pressure on the ruble, foreign capital outflows and sanctions from international organizations, disruptions potentially of oil and gas supplies and the potential war in the ukraine it's clear economic factors were the primary issue. the market leaders in the united states we're going back to business as usual, biotech, pharma, home builders, these are the market leaders throughout the year and they are the market leaders again today. with the one exception the gold stocks understandably with gold to the downside. take a look at individual stocks. another great day for qualcomm they had a lot of momentum coming out of the mobile world commerce in barcelona, they'll have an increase in their
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dividend and buyback authorization is up. there's talk of them going to be involved in 100 million phones with china mobile this year. finally just want to point what's going on with radioshack. big decline there and, of course, they're losing market share dramatically right now. show you where the numbers are so out of whack right now. look at the profits right now. $280 million, look at their selling and general administrative, the expenses, $389 million. way out of whack and that's what they've got to do, get their expenses in linee with what mony they're making. guys, back to you. >> yeah, that's not the way it's supposed to work, bob, i think. safe to say. interesting numbers. let's get to the deal this morning. got a joint press release from disney and dish. i believe it's joint and so you can imagine these companies really do fight a lot over the words and what it's going to be, so you end up with them signing what is a groundbreaking long-term and wide-ranging agreement. all three things. it's not just wide ranging and long term, it's not just long term and groundbreaking, it's
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groundbreaking, long term and wide ranging. but do you know what it is and another word or a couple of words that are being used, actually it's one word twice by the analysts who follow it and by a couple of people who i've spoken to, win/win. hearing that a lot this morning. win/win for this deal. let me tell you a little bit about it. it's what they call a multiyear deal and it allows dish to deliver disney and the disney networks espn chief amongst them, but many others. but it also allows for some interesting things that are part of the landscape now when you talk about these kinds of deals and may, in fact, be a forerunner to other deals that we between content suppliers and the distributors of those contents as well. for example, for the first time dish jus mers can access disney's authenticated live and video on demand products, watch disney, espn and abc family, that's an over-the-top kind of solution if you will. we're seeing that in this agreement.
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as important perhaps as well and what is now going to lead to or has led to the dismissal of litigation between the two companies is an agreement over auto hopper. dish has that and you can hit a button, boom, no ads. they have an agreement as part of this accord that dish will disable auto hop functionality for abc content within the ratings time period so that also is seen as kind of groundbreaking according to the company. but according to other people. let me give you a quick take. over at moffett nathanson on this part of the deal they say, win/win. they are not the only ones in which dish gets to maintain its distinctive product offering and abc gets a mechanism to allow commercials rating credit and c-3 there appears flexibility to adopt the agreement if and when the ad market changes to other standards. be interesting to see if others agree to this especially cbs who
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has been more critical and has a lot more, of course, in terms of pure revenues coming from broadcasts not just subscriptions but both stocks were up disney up rather nicely now, 2.5% move, $142 billion market value. for disney. whoo, baby. speechless. look at you, you are speechless. >> simon, there are no words. >> is it a concern that espn will be available online through dish, wherever you are? doesn't that undercut potentially the rest of the cable companies in a major way, to separate out espn? >> you have to be a dish customer in order to get it offline. >> you can be anywhere. >> but tv anywhere is where we are going and where we are, yeah, that's the new paradigm. that's why this is of importance that they reached this. >> with that let's get to brian sullivan's got some breaking news back at hb. brian? >> thank you very much, carl. and you are always inspired by david's excellent reporting we can confirm that facebook will
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indeed be buying titan aerospace for $60 million. moments ago i got off the phone with a source familiar with what is happening. and the deal may not seem like a lot dollarswise especially when you compare it to $19 billion for whatsapp guys but think about what facebook is getting. titan is what is known as an at-most sat maker. it's a hybrid airplane and satellite. titan makes the planes and they can stay aloft for years because they're all-electric battery technologies and basically solar power keeps the plane aloft but they can carry payloads of anything and in this case what facebook wants is the ability to beam an internet signal anywhere around the world. we know that most of the world, billions of people, lack reliable broadband access. facebook and google are in a race to provide broadband access to those people so facebook going after titan aerospace a new mexico-based company run by
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vern rayburn former of eclipse aerospace. what they want is the ability to throw up basically i don't want to call them satellite but call them bouncing stations might be a better tomorrow so they can provide wi-fi and broadband internet access anywhere in the world. the source i talked to says one sticking point is the faa between 18,000 and 45,000 feet, the faa maintains what they call positive control, in other words, they can tell you where to go and what to do. once you get above that, it's pretty much anybody's haland as long as facebook can negotiate the deals with titan and make sure they can get to 60,000 feet without a problem, as titan planes are up there now, there shouldn't be any sticking point. facebook cnbc can confirm facebook is making a deal for titan aerospace. $60 million is what i'm told. >> access to the internet is key. and the high-altitude balloons that they float all over places and particular in rural areas where access is hard and that
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helps people connect as well. >> it's quite difficult to get the planes up to 60,000 feet, though, that's the issue they'll have. how do you get them up there in the first place? >> we should do a doc on the economics of the stratosphere. >> they find it in the couch at facebook. zuckerberg pulls it out of his back pocket. >> the director of gravity. bring him in. >> he's good. let's head to the bond pits and rick santelli join us from the cme in chicago. rick? >> david. well, stocks are up. what's going on in russia's probably going to be more about news conferences than it's going to be about anything else. that's reflected in the market, we're up five basis points you can see on the one-day chart of ten-year note yields. you can clearly see it. if i were to handicap russia it's a five to seven point issue. you see the year to debt chart of tens and let's swap it for dollar/yen, does it look the same in it certainly does and
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that's important to pay attention to. let's switch gears and go back to the stories of the last couple of days. let's look at a chart short term of the dollar versus the ruble. you can see that things have reversed. if you look at a 20-year chart they've reversed from some very extreme areas on that chart. let's look at another currency that we need to pay attention to that's dollar versus the yuan, chinese currency and it is still hovering in dollar favor at the highest levels since june of last year. we want to pay attention to that because it may be an export issue regarding china. david, back to you. >> all right, thanks very much, rick. >> okay. gold clearly is seeing big gains over the last few sessions. let's check in at the nymex to see how bouillon is trading. >> we're seeing gold trading lower about 15, $16 after a big pop yesterday on the tensions in ukraine and the geopolitical concerns that have been shifting commodities around but traders
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are saying this presents a buying opportunity. they are still expecting gold to have a slow and steadily climb higher so watch those prices carefully. in the meantime, as a result of the backing off of the tensions right now we are seeing crude prices a little bit lower but still elevated. wti over $103 a barrel, traders are saying expect the prices to remain high right now that is because of the demand for products that is going on globally and also on the idea that the economy is improving and rebounding globally as well. last but not least i want to talk about nat gas because we're seeing a little bit of a pop after a selloff. it is still flightfully cold outside and traders are expecting this trade to be range bound. back to you. >> when we come back we're live in moscow with the latest on the developing situation between russia and ukraine as the dow is up 167. getting back everything we lost yesterday and then some. "squawk on the street" will be right back. when does your work end? does it end after you've expanded your business?
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tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. situation in ukraine and russia tense, jim maceda is live in moscow with the latest. hi, jim. >> reporter: the big event today was putin's command performance,
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hour and a half press conference that he gave here in moscow, putin called the military intervention in crimea extraordinary but legitimate. i think his key comment came when he asked about what happens next. he said he didn't think the use of force was necessary at this time in crimea or elsewhere in ukraine leaving open the possibility of force but only as a last resort. now, that signal i think coupled with images of russian forces returning to their bases after putin announced the end of the war games along ukraine's border with russia, the two signals, carl, could really lower the temperature in the standoff that, of course, has become increasingly tense. meanwhile as the u.s. and its allies struggle to come up with an effective package of sanctions, putin addressed the sanctions issue as well warning the west and i must say in a calm and unthreatening tone in today's interconnected world sanctions can equally hurt those who impose them.
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perhaps he was referring to europe's dependence on natural gas. and while putin didn't spell it out, we're getting a clearer idea of moscow's end game. they want to go back to -- they want to reinstall victor ian know could ha yanukovych and they want to return to the february 21st agreement which calls for a national unity government, new elections in december. now, that's probably a nonstarter. but at least, carl, leaders from both sides are talking again. back to you. >> jim, thank you so much. a lot of news to cover in a short period of time. jim maceda in moscow. when we come back, remember the google barge that was floating out in the bay near san francisco? well, it's being forced to move but the new destination might be as mysterious as the barge itself. we'll get more on that. there's this kid.
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to nbcuniversal's coveragens of the biggest loser olympic winter games ever, with the most coverage of the most events on every device. and the most hours of streaming video on the nbc sports live extra app, including the x1 platform from xfinity. comcast was honored to bring every minute of every medal of nbcuniversal's coverage to every screen. so what's next? rio 2016. welcome to what's next. comcast nbcuniversal. as vladimir putin says that there's no need for military action now in the ukraine, the market has continued its upward gain and we've hit another record on the s&p 500 adding now to the strong rally, of course, we had in february which took us up 4 1/2 percent on the markets. in the meantime google's
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mysterious four story floating barge near san francisco is being forced to move or face a $30,000 fine but where you may ask is it going? josh lipton is live in the appropriately named treasure island near san francisco with the very latest. morning, josh. >> reporter: morning, simon. yeah, it's like your local bartender might tell you, you don't have to go home, but you can't stay here. google has been told by state officials that it must move its mystery barge by this friday. the barge right now is stationed on treasure island here in san francisco bay. now, the san francisco bay conservation and development commission, a state regulator, says google does not have the right building permits to stay where it is, so where could the barge be headed? now, we did reach out to google and they offered no comment on the barge's next move. there is speculation that the barge could move to stockton, california. richard sheriffs the port director at the port of stockton tells cnbc that he would, quote, love to have google at the port
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but he says that google has not contacted him. he said accommodate the barge is humboldt, or west palm, and the company would have to get its paperwork in order. guys, back to you. we'll have more places on where the barge could be headed and also speculation what the barge's purpose could be. guys, back to you. >> if you can break that story, josh, you will be the first. thanks, josh lipton out west for us today. coming up the former ceo of sachs is coming up live we'll find out what steve sadove thinks about the turnaround at jcpenney. latte or au lait?
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you can't afford another mediocre night's sleep. know better sleep with sleep number. welcome back to "squawk on the street." dow's up almost 200. our roadmap begins with the situation in ukraine as the secretary of state arrives in kiev, we'll get the latest from the ground. markets are in rebound mode but will the rally hold. shawn matthews with us. tax benefits to the middle-class that's the theme of president obama's budget for next year but does it have a chance to pass? we'll ask that question to congressman barney frank this hour. and a shark is heading to
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post nine, kevin o'leary is here, we'll get his take on radioshack and if it passes his investing test. jcpenney's shares are on a tear after s&p raises its credit outlook. board director and former ceo of sachs steve sadove is here and we'll ask the strategy inside the boardroom. but as we said global markets are in rebound mode after vladimir putin says 32 no need immediately to invade ukraine. invests are holding on to every headline from ukraine. it's not exactly all clear, is it yet? >> reporter: no. it's not as clear. it's as murky as this mist which has been enveloping kiev all day. a lot of dignitaries traveling through here. the uk foreign secretary was in town yesterday. today the secretary of state john kerry in town laying a wreath to the fallen to the near 100 people who died in the
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ousting yanukovych at independence square behind me. i think john kerry's visit here to kiev to show support for the fledgling ukrainian government is more symbolic rather than what the u.s. can offer immediately to this government. but it's great symbolism nonetheless which is much appreciated by this government which has been under a lot of pressure, of course, from the russians and the russian forces in the south of their country. we understand mr. kerry is coming with the offer of a billion dollars, that's if the administration can get this through congress. a billion dollars in loan guarantees and also technical assistance to the central bank, to the finance ministry and indeed as well to the election observers who need all the kind of support getting the election on may 25th for the new president up to international standards, of course, all this comes as russian troops or russian, pro-russian forces, we're not clear what it is yet, simon, as they still occupy the south of the country. mr. putin say no need for force yet but a lot of pro-russian
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forces in the crimea making it very difficult for this government, back to you. >> thank you very much, steve, live from kiev. in the meantime the putin news conference has put a rocket under the market as you can see. the dow up 188. it's a fresh all-time record high on the s&p and indeed on the russell 2000. joining us now is shawn matthews the ceo of cantor fitzgerald. mr. matthews, good morning. >> good morning. >> you have a unique perspective for your business. unique insight in to what is happening with the markets. what have you seen over the last 48 hours? >> i think we're just seeing volatility in the marketplace that's being driven by the external force and that happens in markets, right? if you look at it, this year is going to be a year of volatile ti ty. we'll have okay returns in the equity market but it will be a different kind of return profile than we've seen in the last several years. it will be choppy and a lot of
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volatility associated with it. >> i guess that's good for you if it's volume. volume to you guys is everything, right? >> absolutely. we like volume. >> i see in the meantime you in an attempt to grow the asset management division and that's one of your key priorities that you've actually bought recently the finten partners which is a fund-to-fund operator within fixed income. can you talk us through that? and where the funder funds are very much the way forward rather than nailing your own colors to the mast. >> when you look at finten they're a great operator. they came out of stanford end endowment. they of the best managers i've met in a long time and we view them as bolting them on to our core existing product, having the ability to give them information, having them have the ability to access our 7,000 clients, so really it's a great marriage and we're very excited about it and we think their business is going to explode
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under the cantor platform. >> i know you've made acquisitions when it comes to e expanding the wealth management business, how tough is it for you compete and get talent from the morgan stanleys and the other managers right now? >> i think the world is changing there. in reality what you are seeing is people don't like the culture in some of the places that the they work at now and certainly they are changing. it's a bank culture in some ways, where we're a traditional investment bank in a lot of ways. we're a private partnership, we're the '80s, '90s style investment banker that a lot of people really love and grew up with. we're gaining talent because of that and we're aggressively looking to grow the platform, it's about culture and cantor has a great culture. >> a question on emerging markets and we know the lesson we've been taught this week in ukraine but it's not the first lesson. we know what happens when people reach for yield by going over there, what happens when rates rise at home. are emerging markets still worth it or not?
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>> they're always worth it. so, there's going to be a scenario where you should put money to work or some percentage of your portfolio there. the reality is because we're in this zero interest rate environment among the g-8 in a lot of ways people are stretching to always look for yield, right? and at this point in time there's not much alpha in the fixed income world so it's driving people to always look for that opportunity. i think selectively there are tremendous opportunities in emerging markets. but you have to be careful and do your due dildiligence. >> i imagine you have a number of etfs for that, right? >> we do. and we're very happy about our new etf, too. >> be well. >> pleasure. we are a few days away from jobs friday and, of course, that means another opportunity for you to nail the number and win a prize. tweets your predictions for february nonfarm payrolls. use your handle @squawkstreet and if you win, you'll receive
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this, cnbc hat signed by the whole "squawk on the street" team. are we going to show a video of it? i guess not. we've got it behind us. we'll sign it right now. back here, yes. very nice. sara's going to put it on right now. >> no, it will ruin my hair. >> the ear flaps will work. >> the producer called it a flapper hat. is that what you call it? >> it's a warm hat. i think this one is going to be well deserved because this is an especially hards job number to predict. coming off of two months of bad weather. another month of bad weather. >> do you think it's too late for the bad weather or more? >> i'm still freezing cold. >> are you not signing? >> you sign first and then i'll sign. >> i'm sorry. >> you'll have until one minute before this friday's release. 8:30 a.m. eastern to submit your predictions. i think consensus is still in the neighborhood of 150 although we continue to see estimates around 115. michelle meyer at b of a comes to mind one of the lowest on the
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street and pimco said the whisper is for weaker. we will see if the winter effect really did knock this number to the downside. >> yeah. >> as david signs. >> disappointments in the last two months. there you go. >> faber on the back of it there like a big tattoo. there you are, carl. >> good job. let's get to dom chu. >> i got to get me one of those bomber hats. two embattled retailers first abercrombie & fitch gaining ground after credit suisse up a gra upgraded. and jcpenney moving higher after standard & poor's raletz ised i stable from negative. a programming note in the next half hour in a cnbc "squawk on the street" talks live with former sachs chairman and former ceo steve sadove who is currently on the board. both those shares up 6% on the day. back over to you. ? all right, dom, chanksthanks a .
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the president will propose changes to the tax code in his budget plan 2015 but will shifting tax benefits to the middle-class, do they have a chance to pass in the house? we'll ask it to barney frank. we will have as jcpenney goes on a tear this morning on its credit outlook boost the former ceo of sachs and jcpenney board member, steve sadove will join us next on post nine. he could be the next ceo of jcpenney. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]'ll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪
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the president set to unveil his 2015 budget in which he will seek expanding a popular tax credit for the working poor by eliminating tax breaks tied to the wealthy, the question is will lawmakers bite? barney frank is a cnbc contributor and joins us this morning from newton, massachusetts, good morning to you. >> good morning. >> $56 billion in fresh spending. a lot for education and job training. i'm going to go out on a limb and guess that you like this. >> i do. what i would also point out is that there is a way to pay for it. we are in the midst now of apparently a crusade to let the afghanistan government allow us to continue to spend tens of
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billions of dollars more a year there. i believe and i think there's strong support in the country for saying, look, it's fine with us and we'll withdraw and not keep troops in there, the non-combat troops. we still have a military that's beyond what's needed, but, yes, this spending is very important for a couple of reasons. there's a lot of lip service paid to reducing inequality which you need in a capitalist system but which i believe is now excessive socially and economically and one way to do that is through funding the kind of programs that help people break out of that, for example, junior colleges, community colleges. we ought to make it possible for anybody in the working class who is trying to acquire a skill to go there for very, very little money and not be indebted for the rest of his life. i do support that kind of spending. there's also significant infrastructure spending. and, you know, by definition the private sector's not going to build roads or fix bridges or repair the terrible damage we've suffered this winter.
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>> all right. then put our realism hat. is it doa in the house or not? >> no, it's not going to happen as long as you have a republican party controlling the house that is as far to the right as this one. you know, the interstate highway program begins with dwight eisenhower, all during my tenure until the very end there were republicans who were strong advocates of highway construction, again, you know, there's an argument about what's good for the private sector to do and what's good for the public sector to do. there's no conceivable argument that this kind of set of needs for transportation, et cetera, can be left to the private sector. part of the problem is this, john boehner is clearly decided that he's got to resist the tea party extremism influence. and he's done that on the debt limit and he did it on aid to the hurricane sandy people and he did it on violence against women. but there's a limit to the number of times he feels he can
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do that. so, even where he feel he might be inclined to support some of this i don't see him once again going to war with his own right-wingers. >> congressman frank, if it's not going to pass, clearly it will be used as a platform for the democrats in the midterm elections. what can they point to in this budget? what's fresh when it comes to job creation? because that's really what it's going to be all about, isn't it? >> well, if i had seen the budget, i could probably answer it better. one of the advantages of not being in office you can reduce the number of times you can tell people a lot more than you know. >> that's fair. >> i think there -- i would have to look at the specifics. but i -- the problem is that there's a great deal of skepticism about government in general. we have this paradox. we have with regard to government a whole that's smaller than the sum of its parts. people are very supportive of this or that government program but they don't like government.
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when you talk about a new program or even expansion of one of the existing ones, there could be some skepticism but there's some things very clearly. i asked both alan greenspan and ben bernanke what they thought we could do to reduce inequality which they both agreed at separate times had gotten too great, they both said fund the community colleges. they are a great source of transmission of job skills for a wide range of people. and the trend has been the other way because they have been funded by states. state budgets are constricted, there alone you could by allowing community college tuition to go way down take a major steps towards reducing inequality in the future by providing real opportunities. >> congressman, there is still a huge debate, though, as to whether the trillions of dollars that have been spent on poverty have actually improved the situation. paul ryan, for example, would point out that between 1965 and now officially on the census
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estimates the poverty rate has declined from just 17.3% to 15% with trillions of dollars being spent. that surely is an argument. >> well, there are two points there. first of all, i wish they would use the metrics they use to decide on the war on poverty on the war on drugs which has been far less successful, expensive and socially disorganizing. secondly, as paul ryan really knows, that's not a sensible way to argue. every economists will tell you, you have to look at what the trends had been and the economists call it the counterfactual and it's essential to any rationale analysis. you don't care what was and what is today and say that's what the policy did. you do some estimate of what would have been the case. the fact is that international economic trends, everybody understands that, the change in the global economy, has, in fact, been shifting funding away from people at the lower end of the scale more towards people at the upper end. and the argument i think is very clear that there would be
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less -- that there is less poverty than there would have been. secondly getting 2% of the population out of poverty is not something i would sneeze at. we're talking about a very large number of people. but i think that's the key point you don't just say -- >> over 65 years, congressman? over 65 years? >> what over 65 years? >> that you got a 2% move over 65 years and trillions of dollars, that for many people might seem that perhaps it could have been better? >> oh, everything could have been better. you know, my performance this morning could have been better. the question is what would have been in the absence. would there have been a significant increase in poverty? again, it is simply not a serious economic analysis anywhere except in the political arena to say here's what it was, here is what it is, the policy failed. it's here is what it is, here are the trends the policy had to cope with and here's the answer. it's clear there would have been more poverty. if, in fact, on its own poverty
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a was increasing economic trends were saying that it was, then a reduction in the face of that is a significant advantage. secondly, i don't know how they get the trillions. what are they counting in there? are they counting medicaid? i bet they are. without medicaid, we'd have a lot more people without adequate medical care. so, trillions over 65 years and, again, i don't know where the 65 years came from, certainly linden johnson declared the war on poverty just 50 years ago. >> right. >> i guess the 15 years before that i guess he's blaming eisenhower, because if you go back 65 years you've got eight years of the eisenhower administration. i guess paul is so eager to make the political point he's picking on poor old ike. >> they don't like ike. we didn't have time to cover ukraine with you, congressman. next time. good to see you again. >> thank you. >> barney frank joining us from massachusetts. a shark is heading to post nine. he may be known as mr. wonderful.
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radioshack today saying it will close 1,100 underperforming stores or about 20% of its total footprint. radioshack sales have been basically in free fall amid executive departures tough competition and image problems to name a few. where does the company go from here? we're joined by "shark tank's" mr. wonderful, kevin o'leary and the author of "cold hard truth on men, women & money." what is the cold hard truth of radioshack? >> it's very simple. hates the same gravity that every other retailer has. it's a merchandiser. it has to try to figure out what
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products it has inside it that will entice a consumer to buy. the problem nobody has focused on and the reason it's failing is that basically the number one item people buy is a mobile device now. so, i can go to any of the merchandise locations of an at&t or verizon or sprint or t-mobile and get 80% of what i want to buy every year and i think that has eroded the base upon which radioshack built its base in the first place. i won't buy a resister or a cell phone or ipad. >> they tried to pivot toward that, they tried to set themselves up by selling more mobile accessories, at least. it just hasn't worked and they are stuck with this image problem that they are old school. >> here's what i think will happen at the end game. this is going to go to zero unfortunately in my opinion ap along the way, the assets and the locations will be scooped up by mobile players because if you want to sell more mobile phones and you want retail locations,
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radioshack's a great place to get them. the question is even if they close 1,100-plus locations, the prime ones are still available. if they never change their merchandising philosophy. if they never find a way to build back share, they'll go to zero and their protein, they'll be bought by verizon and at&t. >> forgive me, why is it that verizon and at&t can succeed in selling mobile devices but radioshack can't? >> because they bundle the service with the hardware, and if i'm going to buy and i'm a subscriber to verizon, why would i buy it from radioshack? why wouldn't i go to the verizon store which has 80% of what i need, i don't need a radioshack in the equation anymore. they just don't add any value. >> because you need the subsidy? >> apparently we're not going to go to the chinese model. we'll continue with a two year, one year or some kind of subsidy. the best economic value for me to buy a new device is walk into
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the providerer's retail location. >> it's still an iconic brand and it has to be worth something. >> the real value may be the locations it has. would i deploy a million delrs into their stock? no, i think it's going to zero. >> we've had tough real estate rationalization with other retailers like best buy that didn't wind up like that. >> think about the mix of product inside of best buy. if i want to buy a printer, if i want to buy a router, if i want to get a new flat screen tv i at least have those options in the best buy format. the footprint of a radioshack is too small to offer all of that and they are destined i believe to become part of the appendage of a provider. that's the only way there's value left. i'm sorry but you got to deal with reality once in a while and this is the case. >> you're not going near it. >> thanks to kevin o'leary and a reminder you can catch back-to-back episodes of "shark tank" every tuesday on cnbc that
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starts at 8:00 p.m. eastern time. the dow just a second ago was up 200 points. we're looking at the best day for the dow for the entire year. in fact, you got to go back to december 18th to get an action to the upside better than this one. of course, doubling what we lost yesterday on the back of that news out of ukraine. we'll see what the afternoon session brings as well. when we come back, one retailer having a good month, jcpenney. check out this chart, shares are up 70%. s&p 500 betting on them, too. raising its credit outlook. could the turnaround be attributable to this man? steve sadove? board member and some say one day the ceo. we'll have that story when we come right back.
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to nbcuniversal's coveragens of the biggest loser olympic winter games ever, with the most coverage of the most events on every device. and the most hours of streaming video on the nbc sports live extra app, including the x1 platform from xfinity. comcast was honored to bring every minute of every medal of nbcuniversal's coverage to every screen. so what's next?
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rio 2016. welcome to what's next. comcast nbcuniversal. about an hour into trading, some of the stories we're talking about, markets are in rally mode. s&p hitting a new record high today. five dow components hitting new highs. home depot, united health, dupont, disney and pfizer and tesla up more than 2% as the company says it will expand its supercharger all over europe by the end of the year. let's send it over to bob pisani to the floor of the new york stock exchange.
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>> we thought this might go on for days or weeks, we weren't sure yesterday and people were short, now all of a sudden it looks like it's not that serious and may end. the market is rocketing up, 10-1 advancing to declines stocks. s&p 500, midcap, russell 2000, it's friday but we're even above where we were on friday. sectors very unusual. seven out of ten up more than 1%. that's a broad rally. so it doesn't matter whether you are a cyclical name, whether you are a defensive name, all the major groups are up, industrials, health care, consumer staples are up along with consumer discretionary. we've got very unusual volume movers. epam is paced in pennsylvania. they sell software and tech systems in eastern europe and the ukraine, so they were down big yesterday but, look, they're up 17% today, just sort of rocketed back. i want to walk you over here, come here. they got a competitor, luxsoft and i'm behind post nine. take a look, up almost 20% right
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now. they do outsourcing of i.t. services, they compete against epam, most of the engineers are based in the a ukraine even though the company is headquartered in sitland, it was down yesterday, look at it, they are up 20% today. they had a conference call that say it may be beneficial because it may lower labor costs in the ukraine, so they do outsourcing of i.t. services and lower labor costs mean better prices for its customers and ubs some of the big financial firms over there. you can see this whole thing has gotten very interesting financial repercussions for firms who do business in and around the ukraine. guys, back to you. >> thank you very much, bob. big rally. shares of j.c. pen jumping after standard & poorscpcht po& from stable to negative. let's get insights on a cnbc exclusive is steve sadove who currently is on the board of
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jcpenney. he's, of course, the former chairman and ceo of sachs which he sold. good morning. >> good morning. >> you've just moved on to the board of jcp, do you feel like you're hitting it at the bottom. >> i feel really good about what's going on at jcpenney, clearly it's a turnaround. the stock took an enormous hit as did the company the culture and the environment. and they made major changes in terms of getting the company back on track. restoring consumer confidence. and you feel a sense of momentum in the company right now. >> it's physically 11 times the size. jcpenney is 11 times the size of sachs in terms of outlets. what do you learn from luxury retailing that you can then apply to this much bigger retailer that clearly is at lower price points in the industry? >> i think in the end it's all about satisfying the consumers' needs, understanding who your consumer is and catering to them and providing them the products and services that they want,
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whether it's the high end of a sachs or nieman's or a jcpenney level, it's really about giving them the products they want. sunday night you saw in the oscars some terrific advertising that was all about fitting the individual jcpenney customer because it's, again, going back to the basics of the products they want. >> first quarterly sales growth since 2011. how involved is the board which is much more seasoned executives in the retail industry in engineering the turnaround? >> it's mike olman and the team that helped the turnaround, this is clearly their show and they've been doing a great job of getting back to basics. >> you need a new ceo still, right? >> mike ullman did retire. he doesn't want to stay there long term, he wants to get a succession plan in and place and make sure it's a smooth transition and over time you'll see it unfold. >> that's the acute
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responsibility of the board, obviously, to have the succession plan. >> absolutely it's a key role of the board to make sure we have the right team in place and the right leadership. >> some speculated it would be you. >> not a chance. >> not a chance. >> not a chance. >> why is that? why wouldn't you -- >> i am very happy doing what i am doing. >> you are still a young man. >> i like living in new york. i'm enjoying the boards. enjoying the consulting. i don't think you'll see me doing that. >> what about xon sconsolidatiou >> i think you'll continue to see it. >> men's warehouse, joseph a. bank make sense to you?
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>> i think it does make sense. there's an enormous amount of synergy. >> the comps at jcpenney, some argue the progress is great but you have to do double digits in the back half of the year. is it realistic? >> i think double digit growth is realistic overtime. >> over time. >> they gave guidance in the 3% to 5% range and i think that, you know, in the first part of the year, and i think that over time -- over the course of the year you'll continue to see accelerated growth. they are relaunching the home business right now and i think you're going to see consumer traction but i think that's for the team to talk about their growth rate. >> let me take you to broader retail themes at the moment. it seems to be we've had a lot of bad news about retail. through the holiday season we were talking about heavy discounting and overcapacity. then we've gone through now the beginning of the year two months of very bad weather. from the contacts that you clearly have throughout the industry what is the mood at the moment and what are people going
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to do with inventories and capacity? >> it's a great question. i think it a tough vorenvironme out there. the fourth quarter sales had interesting phenomena going on. the luxury market is holding up pretty well, nieman marcus is in the 5%-type range, but it's more promotional, free shipping and free returns and the consumer is looking for that deal. the weather is playing negatively across the board for everybody. i think what you're finding, though, if you look at the results is that there are winners and losers. the winners are the ones that have invested in technology and playing in the omnichannel space and it's cutting across every category, home improvement stores for home depot's and lowe's and macy's in the department store space, the companies that have invested in technology -- >> shouldn't that go hand in hand with major store closures or at least partial store closures in order to take the capacity out to maintain the profitability? because you're not increasing volumes overall really and you
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don't see those sorts of announcements, do you? >> you are seeing some. jcpenney as an example closed 30-some stores. macy's closed a few stores. you are seeing some capacity taken out. is there more that needs to be taken out of the industry? absolutely? >> you think jcpenney goes to japan. not jcpenney. j. crew? >> i have no idea whether it will happen. they admire mickey drexler. he's a wonderful leader and i think j. crew's a great company. >> how about darden and red lobster? this is so much fun. >> i think the space that red lobster is this is a tough space and i think they have re-engineering they are looking at, but, again, it's a tough environment. >> finally on the tough environment coming back to a question we've entertained many times, mall-based retailers and there's a seminal change in people's willingness to visit a mall. you sold out, you had a lot of
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mall-based businesses. what do you think? >> there's no question there's a change that is taking place. they go to the malls for entertainment and restaurants and shopping. there's a reason for the mall but there's energy and new energy that has to be brought to the mall. >> it's like serving against agassi, every ball just comes right back. unbelievage, steve. >> thank you. steve sadove, the man who brought a full floor of separate zip code shoe department in new york. and let's get another check on the markets and traders absolutely glued to the news out of ukraine. the tensions eased, the dow up almost 200 points and the s&p 500 rebounding more than 1% and the nasdaq up 1.7%. we'll be right back on "squawk on the street." ...return on investment wall isn't a street...
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in just under 30 minutes the secretary of state john kerry is expected to speak in kiev. nbc's jim maceda has the latest from mass coscow this morning. hi once again, jim. >> reporter: hi again, carl. the big moment of the day, moments i should say, was president putin's vintage performance at a press conference earlier. he spoke for an hour and a half looking and sounding extremely confident and along the way made several key comments that signaled that putin doesn't feel he has to push things any further on the possibility of the use of force, he said he didn't think that was necessary at this time in crimea or anywhere else in ukraine leaving open, of course, the possibility but only as a last resort. he also said he didn't see annexing crimea into russia as a, quote, opportunity to be seized and added that he would never encourage any aspirations
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of splitting ukraine apart. now, analysts are saying that those kinds of comments coupled with those images of russian forces returning to their bases today after putin announced the end of the war games along ukraine's border with russia, all that should really lower the temperature now in the standoff that had become as we know increasingly tense. meanwhile as the u.s. and its allies are struggling to come up with some kind of sanctions package, putin also addressed that issue. he warned the west but in a calm, unthreatening way that in today's interconnected world sanctions can equally hurt those who impose them. so, overall, putin's tone was calm. it was reassuring. and the russian markets seemed to reflect a general relief that the world had dodged a bullet at least for now. russian markets up some 6% today on yesterday's 10% loss. carl, back to you. >> all right, jim, i'll take it from here. thanks very much and we'll see
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you soon as we await secretary kerry's remarks in kiev. let's bring in michelle caruso cabrera with more. michelle, this is obviously a huge economic story. it's a lot calmer today. >> absolutely. you can see that when you look at the russian markets, not just the global markets but the russian markets as well have responded positively. they gained back all that they lost yesterday but certainly there's some relief. let's remember, though, that putin still has some other levers that he can use financially speaking. we'll watch to see if and when he uses them. he can call the previous loan. we expect the imf to give ukraine a loan. when they do that, they'll likely be at a gdp -- a debt to gdp ratio of more than 60%. believe it or not, that would be a violation of one of the covenants of one of russia's loan and russia can recall the loan and put financial pressure on them and also the west to add
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more money to the deal. they could make trade extremely difficult by doing all kind of product safety specifics requirements and trade is a huge issue between ukraine and russia and they could force ukraine to pay them the money they owe when it comes to natural gas. ukraine has hundreds of millions of dollars of arrears to russia and russia can influence the key referendum that will happen in crimea in late march whether they want to be part of ukraine or russia and secede or be independent, et cetera. there are still questions why did putin blink. he does appear to have blinked at least militarily. international strategy and investment said maybe he was shocked at just how much the russian markets got pummeled yesterday. in addition the threat of targeted elite sanctions. robert frank talked a lot about this, whether or not the elite members of russia would not be able to travel, wouldn't be able to access their money, that would be punishing, along with actions that would diminish russian corporates and their banks access to sources of low-cost foreign capital may
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have proved more effective than a lot of people widely recognize. the caveat it would be naive to jump to the conclusion that the crisis is over. at least today as you mention, sara, when you look at the russian market and the russian ruble, there does seem to be some improvement in investor sentiment. >> there will be people that actually say that putin here has got what he wanted, you know -- >> yes. >> -- by taking things to the edge, taking things to the brink everybody got very excited and now he walks back and everybody is whew, that's fine, and in the meantime he's occupying the crimea. >> i think that is a spot-on analysis, simon, absolutely. >> thank you, michelle. michelle caruso cabrera. let's send it to dominick chu with a quick market flash. >> a different day, a different direction for the russian stocks hit hard yesterday, they're all bouncing back nicely today as the crisis in ukraine eases at least for now. kiwi, the paypal of russia, mobile tele systems and yandex,
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and all moving higher today's session and, of course, the russian etfs moving higher as well along with the other bounceback trade. simon, russia certainly a focus for investors on the up side today. >> dom, motorists are spending record amounts on vehicles and financing is at a new high and phil lebeau will help us break down the numbers on how consumers are borrowing and spending next. and john kerry expected to speak in a few minutes. we'll take you there live when it starts. ♪ [ banker ] sydney needed some financial guidance so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals,
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with investment information, risks, fees and expenses to nbcuniversal's coveragens of the biggest loser olympic winter games ever, with the most coverage of the most events on every device. and the most hours of streaming video on the nbc sports live extra app, including the x1 platform from xfinity.
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comcast was honored to bring every minute of every medal of nbcuniversal's coverage to every screen. so what's next? rio 2016. welcome to what's next. comcast nbcuniversal. it is time to get to chicago. the cme group rick santelli with the santelli exchange. treasury yields are back to higher. the world is a calmer place. >> yeah, yeah, i guess it is a calmer place. would have to arrived at that spot at some point because i think everybody out there realizes i don't think you're going to see u.s. or european troops squirm itching over what's going on in ukraine. it is what it is. it has affected markets. it's to that end today we're going to take a quick trip around the track on the technicals regarding the ten-year. it wasn't that long ago that we
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explained that we let the high yield of 303 for a ten-year at the end of last year and basically that was the first print this year. and we established that the 38% retracement of that move came in at 275. okay? now, on the 12th of february we had a close of 2.76. it's what we used to refer to on the floor as the touch rule. it's good enough because they touch. so, now let's fast forward. yesterday's yield close was at 260. that's the lowest yield close. that was after a period of about ten session where's we had a very tight range of closing yields and tens between 271 and 276. what's the point of this? we now have much more information for you traders out there. remember, february 3rd is key. that yield, 257 on a closing basis. we did not violate that yesterday. so it's pretty much easy.
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we're going to continue to track weakness in stocks with yields going lower in a very proactive way. when yields tend to move up much more slowly, when stocks move up. so here's what you do. you have 276 on top. you have 257 on the bottom. those are your breakout points. many traders down here are going to use 265 as a pivot. now you're all taken care of. let's switch gears a lit. you know, only in politics can you say that spending and success are synonymous. truly. and no matter what the issues are if you spend more on them and you don't necessarily do cost benefit analysis, the masses are happy. here is a quote by former senator alan simpson. let's throw it on the screen. that's a sparrow belch t in the midst of a typhoon. what is he referring to? how our politicians were elected and sent to washington to serve the people need to deal with entitlement reform.
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no matter what your position is it can't go on the way it is forever. we're going to have alan simpson around 11:35 today to discuss what will be the president's budget due to be released today and ask him what type of report card he will give to both sides of the aisle. simon, back to you. >> thank you very much, rick. it's shaping up to be a good 11:00 hour this morning. also coming up, we have the buzzfeed's president and coo jon steinberg. he will give us his take on the social media buzz including radio shack and microsoft's new answer to siri. after the break, americans are spending record amounts on automotives. our phil lebeau will have that report. ♪
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new data shows americans are spending at record levels when it comes to cars. that alone not too surprising because the price of cars are going up. when you hear how many months car buyers want to stretch out their loans for, that may shock you. our phil lebeau has the details for us. phil, staggering numbers when it comes to bor reing. >> we're taking out bigger loans because the cars are costing more and adding more content. here's the latest data looking at the fourth quarter of last year. the average new car loan was
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$27,430. that's an all-time high. up 739 from the fourth quarter of 2012. the average monthly payment, however, is only gone up $11 to $471 a month. still under that $500 threshold where dealers like to keep it. the interest rate, holding steady at 4.3%. here's the reason that that monthly payment is staying under $500. look at where the growth in auto loans is at right now. up 19% in the fourth quarter for those between 73 and 84 months. basically anything longer than six years for an auto loan, that's the sweet spot. in fact, that's tripled in the last five years. look at the auto dealer stocks over last six months. these guys had a nice move in early 2013. since then, it's been, you know, pretty much treading water, maybe slightly up for a few of them. the bottom line is this, guys, we are taking out bigger loensz and taking longer to pay them off. >> it's probably because americans love their suvs and truck, right?
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>> yeah. it's hard to buy a pickup or suv for under $30,000. if you're going to go that route, you're paying at least that much. >> phil, having said that, sales are a little bit -- at the moment, on the volume, at least. >> right. they're all counting on warmer weather in march bringing people back into the showroom. we will see that f. that happens. >> phil lebeau, always good to see you with that story on higher amounts of borrowing for cars. we are getting ready for the next hour of "squawk on the street." let's hand it back to carl and to kayla at post 9. >> all right. thanks. it is almost 11:00 on the east coast. 8:00 a.m. on the west. we do have so breaking news this morning. in about 150 minutes the secretary of state john kerry will give a speech in kiev addressing the situation on the ground there. senior officials say he told reporters on the plane he still believes that vladimir putin can deescalate the situation. putin has made some remarks already and that's why we've gotten back what we lost yesterday. markets are pivoting on every
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change on this story. the dow is up 200 points. we'll take you live to ukraine when kerry begins to speak. in half an hour the president will unveil the budget for 25 20 15. >> we start with the markets today. major averages erasing all of monday's losses with a massive snapback rally. let's bring in david katz with matrix asset advisers. the dow up nearly 200 points. more thanner raising the losses from yesterday. so to what do you attribute the sell-off and the bounce back? people were obviously spooked about what is happening in the ukraine. there's a sigh of relief today, the market is bouncing back. it's interesting, it's bouncing back more than it sold off yesterday. that's a great lesson to investor s is don't sell on the panics and don't chase on the rallies. if you think the stock is going to do 10%, 11% after the year, be a buyer. when the market is rallying
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that's not the time to be putting new money? >> david, there was a guest on cnbc europe this morning who said you buy on the almost wars and you sell on the actual wars. i know that's putting what's happening in ukraine lightly but in terms of the markets, is that the way we shouldity about the ongoing geopolitical volatility? >> you want to look at whether the geopolitical volatility, it's not going to have an significant economic impact on the worldnd sthurly on america. as a result, as the tensions ease a little bit we think the market is going to get back to looking at the economy and corporate earnings. that's good. >> so now that your focus is shifting again. we have the big jobs number coming out on friday. a lot of traders are watching the ten-year. david, what are you watching? >> well, in terms of the ten-year we think bonds are at the low-end in terms of where interest rates are going to be. if you own low-end, we would
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sell. in terms of the economic data the labor number is going to be important. we probably are around consensus and we think the you get consensus it allows the fed to continue with their program and allows the economy to do well and the market to really focus on earnings and corporate earnings. that's a good thing for stock invest investors. >> how are youing looking at volatility, david? there have been a lot of market watchers who said the market goes up, goes down. the one thing you can count on rather is volatility. how do you think about that? >> we would agree with that. we think that 2013 did not have a lot of volatility. it did not have a lot of market pullbacks. 2014 is going to be far more volatility. there are going to be a number of pullbacks. when all is said and done stocks do 10%, 11%, 12% for the year. if you have a 5% or 6% rally, that's not time to get more aggressive. >> i'm looking at your stock pings. capital one, procter & gamble,
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johnson controls. these are companies in a wide range of industries. does this affirm the fact this is a stock picker's market and how do you find the value in this market? >> we like to buy good businesses and good industries and buy them under 13 times earnings. johnson controls is helped by a better global economy, helped by friends with automobiles and with batteries. you just talked about automobile sales being okay. so we like those type of companies. they're going to benefit by a better global economy. and you're not paying a whole lot for them. procter & gamble has lagged this year. we think there are better things in store for them and the company is under a lot of pressure to do better for shareholders. >> david, we're looking at the board and tul a stocks are in the green doing well with those picks today. we'll have you back and talk about them more. for now, david katz from matrix adviser, thank you for joining us. >> thanks a lot. joining us this morning onset, jon steinberg, coo of buzzfeed and our own jon fortt
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as well. we'll start with radio shack. it will close up to 1100 underperforming stores across the country. comes as same-store sales fell in the latest quarter. news not kind to shares of radio shack down big in trading today. jon, it's been argued. you could make a case that of amazon's victims they are the most hurt. >> it's a repeat of what we saw with best buy. twlor trends going on here. the first is showrooming. you go in and you look at stuff and try stuff and then go online and buy it. the iab released a survey saying 27% of people go into consumer electronic stores showrooming and 25% go in not ready to buy. there's that trend. and then we have mobile softness. it was just cited on management's conference call. >> how did best buy get this right because you look at best buy stock, 81% of the products you see at best bayou can find on amazon. so they're a victim to a similar trend. but they seem to do okay. >> i think radio shack has been in trouble for a while. that sort of got papered over a
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bit by growth in the wireless industry. they very much track with that. the carriers are trying to sell lte prks broad diversity of phones out there. that helped radio shack. the more the smarlt phone market has trended toward apple and samsung, that has hurt radio shack. you can go to the apple store and find the full range of iphones. just selling samsung, doesn't have much margin. >> for a long time the -- best buy has smaller footprint. radio shack is almost too small. >> i think the most interesting radio shack could consider is a partnership with amazon. you could imagine get ur you amazon essentials, white letter cables at radio shack. imagine having in-store pick up. you cannot do elethat. you have to so online for those local logistics. >> right now they're positioning as the ghetto electronic shore
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is not working with them. speaker, headphone, and plugs. kind of like the, oh, i forgot that store. there's not a lot of margin in that. >> when you think about the actual balance sheet. four years ago, talk of $3 billion radio shack buyout. now they have a market cap of $239 million and balance sheet is heavily in debt that they don't much of anything. what are their options here, jon? can you see a partner like an amazon partnering up with them? >> that could be possible but they've got a bunch of storm clouds to work through right now. first is this 1100-store closure thing they want to do. they have no negotiate the lease impacts with their landlords. and they're not at all sure how that's going go. hope that landlords will lower rents. they have a threshold of just over 4200 stores they have to keep. if they don't keep those they end up with debt issues. >> bring in the real estate lawyers. that's going to be a big chore. siri has some competition. the verge report that microsoft's upcoming window's phone update will include a
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personal digital assistant like siri dubbed cortana. it will take the form of a circular animated icon and name after the "halo" video series, bring in phoenix. >> i think cars is a little mega trend. desktop, mobile uks car. . 61% of people commute over 60 minutes a day commute alone in a car. there is so much usage that's going to happen right now and voice is the only way to do it. with wearables, voice is the only way to do it. i'm psyched to see microsoft going after this hard. >> but at the same time, wearables, cars, seems like microsoft is very far away from a big development in either of those spaces. so how does this actually help them in the near term? >> i think it potentially helps them with the xbox tie-in. they're not shy about that with this branding. i think it's important for them in a space. you mentioned wearables.
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of course, cars we see am making anning a ing ning a aggressive . it hassen worked so well for ford. they've got a black eye there. you want to see them in april at the build conference where it gets a further rollout common stratding this really works. >> if you look at the windows mobile os, critics said it is not such a bad interface but it was too late. people had become too accustomed to the ios experience. when they t got there people couldn't make the adjustment. people have not yet set up defined ways they interact with voice interfaces. siri has t not been a huge success. it doesn't work perfectly. they can compete on equal ground. >> i want to see if they release this on iphone and android. they could. that would certainly be new ground. >> and go after google now because google now is built in on android and you could switch your voice experience. >> people only buy 15 million new car nsz a year as opposed to
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40 million iphones in a quarter. >> there's the after market as well. you could see them go in and do a deal with pep boys or walmart. granted, it wouldn't be built in. it may just be a device with a suction cup but it could be that experience, too. >> this in and of itself isn't going to be a huge market but it's important to your eco system and defensively and maybe you can build something on top of that with wearables. >> garma, too late? >> i didn't know they were still publicly trade. >> does cortana still have to have a sense of humor? >> being predictive is what count, how long your commute is, this package just shipped. >> from microsoft to apple, the company's cfo peter oppenheimer saying he will retire at the end of september after 1 years with the company. luca masestri will serve.
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it was rumored this was going to be announced at the annual meeting. >> apple is detailed at the press release about everything that peter oppenheimer is going to do during his retirement. how much tim cook appreciated him. very clear here that everything is above board. this was planned long in adva e advance. what i find interesting is you can trace apple's changes through the cfos. fred andersson was the battle back cfo. peter oppenheimer has been the growth cfo. we'll have to see how the new cfo manages the giant apple and communicating to wall street exactly where it goes from hoo. >> and maestri is the architect of the buybacks. not necessarily the one who came up with it or decided to do it but the one who got it done. could he be the employer for capital acquisitions. i couldn't find any giant deals at xerox but it's a change in the management at the top and he could do a totally different kind of financial transaction for them. >> oppenheimer has had a lot of
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face time with wall street analysts with tim cook and steve jobs was involved with the innovation. do. >> i think cook is a different executive. i wasn't at the goldman conference this year. i was t at it a year ago. he was on stage being interviewed. i think cook is going to be more external with wall street. maybe it's a little bit of a readjustment of the structure. >> a lot of news in tech today as there is every day. meantime, still awaiting remarks from the secretary of state john kerry in kiev. john harwood is at the white house with the latest on that. good morning, john. >> carl, we're expecting the secretary to give a little readout of his meeting so far in kiev. he, of course, visited a shrine to some of those killed in the uprisings. the united states government is planning sanctions against individuals involved in the chain of command. perhaps other economic sanctions. whether or not europe is going to go along. but i think everyone is also breathing a little bit of sigh of relief as to the initial indications from vladimir putin
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in pulling some troops back to their bases that maybe tensions are easing a lbit, as the stock market is reflecting. we'll have to wait and see whether john kerry wants to echo that note of perhaps a corner has been turned on this. >> there's also the issue, john, of loan guarantees. senior officials saying the u.s. trying to get a billion to help insulate those ukrainian households that might be vulnerable. how high is that on the list of things to do? >> high. the john kerry talked about that some days ago. and then yesterday the president made a point in the photo-op me had with israeli prime minister netanyahu that he wants that to be the first order of bis business by congress. last night eric cantor said republicans are preparing a package. it does look like there's going to be some agreement on this. and, you know, i think the thing that will hold it up more than anything else is probably the new ukrainian government getting organized in a fashion so that they can implement some of the
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reforms the united states wants to see happen before money goes over there. there's an imf team in kiev just as secretary kerry is. they're due to be there for ten days to try to analyze needs on the ground. and so i do think there is a move forward both in the u.s. government and with our allies to provide some aid, even as we look at signs that may be tensions are receding. >> right. on a day where we're getting our own budget unveiled here for 2015. john, thank you so much as we await the secretary of state in kiev. >> busy day for john. we'll hear more from him on the budget later and bring you the remarks from secretary kerry in ukraine as soon as we have them. right now, the markets are rallies on optimism. the situation is easing. keep it here on "squawk on the street." we'll bring you live to nose remarks as soon as they get under way. first, rick santelli talking to former senator alan simpson this morning. rick? >> what a great day to talk to
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the former senator and, of cour course, we all remember one of the reasons he's famous is the simps simpson bowles commission. how would the u.s. have been different had we adopted the suggestions in that commission? we're going to ask the former senator those questions and to grade both sides of the aisle as we get ready for another round of politics with the 2014 midterms.
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on a day when markets are broadly in the green, look at the industrials. it's the biggest wib winner wit day with a big rally. for that, we have more from seema. >> leading the industrials higher are two airlines, delta and southwest. this as the latest storm swept across the country that canceled thousands of flights dissipates. delta saying the passenger unit revenue in february increase bid 4% year over year. now, defense stocks also moving higher led by general dynamics and northrum drummond. we're moments away from a speak by secretary of state john kerry. steve? >> hey, kayla. john kerry can offer two things to the ukrainian people here in kiev and the government. he can offer them aid and give them meaningful support. we think there will be something along those lines in his speech.
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he can offer legitimacy. as we heard from president putin in russia today that is a key issue because he believes that yang yanukovich within the last two weeks, he still believes he is the legitimate president of this country. we're going to listen to what john kerry says ability ledge mizing this government and the process to a tul-important may 25th elections. of course, until then, maybe the putin administration is still going to say this is an illegitimate government in place here. quite frankly, they need money. the economy minister told me and cnbc yesterday the coffers are empty. they have $15 billion left and that is enough to pay less than two months of import bills. the russian gas giant was squeezing the country today saying arc chctually prices areg to go up from april to $400 per thousand cubic meters. that is a huge increase.
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this is an economic decision because ukraine is not paying its bills. others are saying this is purely political. elsewhere, the imf is in town today. short-term and long-term aid package which is it is operately needed for this country. coming into this week, many are saying the country could need over the next two years as much as an aid package of 35 billion u.s. dollars. there is, of course, the huge issue of russian or pro-russian rather than russian, mr. putin put it, troops in the kremlin at the moment which the sovereign ukrainian country. the p.m. talking to me yesterday in this country saying that is unacceptable and there must be no more russian boots on the ground in ukraine and only then can we have a resetting of the relationship between russia and the ukraine as well. so it's a huge number of issues still on the table as we wait to hear what mr. kerry has to say, kayla. >> and, steve, you've obviously had a front row seat to the color there in kiev.
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what's been the mood of the opposition, especially in light of the comments that putin made earlier this morning? >> yeah, i mean, people have come up here and time after time have said putin is calling us ultranationalists, calling this p government with friends fashionist. they're comparing it with his like 1968. some have been referring it to 1938, of course, and that is a reference to the german nazi behavior where the germans went in to chezech slovakia. eerily similar language. they're getting right back to mr. putin here and saying your actions are eerily similar to what we heard from perhaps the greate esest dictator in histor. i've been speaking to so many politicians and mps and business
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leaders, many of them are actually ethnic russian speakers saying they have no knowledge of any infringe ms of the human rights of any ethnic russian speakers of any ethnic russians. now, that's either in the east of the country where we've seen quite a few pro-russian demonstrations as well. what many people want is economic improvement, prosperity and the key issue in this country isn't if you're ethnic ukraine i don't know or tart tear. the key here is the revolution we had back in 1994, actually led to the signing of that budapest memorandum which meant that the territorial integrity of this country was guaranteed by russia. what they really want to see is economic improvement. they want to see an end to the endemic corruption. corruption is an enormous issue. the imf has been here two times previously offering packages. once they froze the loans
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because tim, a pro-western government, when she was prime minister she just wasn't getting on with the reform program. in 2010 it was yanukovich who they froze the loan on because he, a pro-russian, wasn't completing the austerity terms and the change economically in this country. so they had their chances both pro-western and pro-russian governments time and time again. they just haven't delivered. now this government has to deliver other wise it could be on shaky foundations. >> you do mention a spring of '68 and spring is 16 days away here. similarities are eerie. steve sedgwick joining us from kiev. dow is still close to the session highs. it's the best day since december 18th. as we said, we are waiting for the secretary of state, our chief international correspondent michelle caruso-cabrera is back at hq. >> i think he's going to be pretty clear on offering support. we've already gotten clear messages from the white house about exactly what he's likely to see or talk about.
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steve did a great job of highlighting all the challenges that ukraine faceses right now and a lot of what's being talked about for u.s. reflects those challenges. first of all, $1 billion in loan guarantees to offset what is likely to be a rise in gas prices. ukraine subsidizes on a grand scale the cost of energy for the ukrainian citizens. it's distortive and affects the economy in big ways. so they want them to stop that. so does the imf. so as a result, they're going to do a billion dollars in loan guarantees. the most vulnerable ukrainians don't have to pay higher energy costs. technicals a zhi ta technical assistance for free and fair elections. the 2004 revolution caused by the -- orange revolution caused by the wide spread belief it was a fixed election original lid and steve highlighted all the corruption we talk about. speaking of which the other item is likely help in recovering stolen assets. a lot of focus will be on
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yanukovich. the splendor of his palace, the former president highlighting what is likely a situation of wide spread ripping off of the country. we guarantee yanukovich isn't the only one. finding stolen assets is going to be something they're going to need help with and the u.s. is offering technical assistance on. and, also, possibly and they weren't very clear about this in the fact sheet put up by the white house. when it comes to russia doing some kind of punitive action, when it comes to trade against ukraine, it's pretty likely. we already know they're going to raise natural gas prices and they're going to force them to pay arrears. steve was just reporting that. there's going have to be be a technical offset, financial offset to help them out on that. this is still pretty small, guys. ultimately the big money will have to come from the imf and also the western partners in the western europe. >> are you willing, michelle, so to say we've moved from a military threat now to your more
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run of the mill emerging market debt threat? >> yet today, i think putin was clear on walking everything back. so militarily, yeah, not much to talk about at this point. could that change? possibly. i think if there was some kind of provocation on the parts of the ukrainians who would very much like us to get involved, right? it is their -- if they believe they face an exso sensual threat they want to see the u.s. and west involved. so they are incentivized to inflame the in ways that bring us closer to helping them out beyond perhaps financially speaking. if they think though that the u.s. ornate to is going to get involved militarily, i find that incredibly hard to believe and extremely unlikely. that would be a very bad hand for them to play. but i think financial assistance, i think the west is just waiting to figure out who do they write the check to and how soon can they do it? >> michelle, you're so great ant
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putting the tenuous situations in such clear context for the viewers. but we appreciate it. and right now you're looking at a picture of secretary kerry beginning to speak in kiev. let's take a listen. >> good afternoon, everybody. let me say, first of all, how incredibly moving it was to walk down on to the street and to have a chance to be able to pay my respects on behalf of president obama and the american people at the site of last month's deadly shootings. it was really quite remarkable. i have to tell you, to see the
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barricades, see the tires, see the barbed wire, see the bullet holes in street lamps, the extraordinary number of flowers, the people still standing beside a barrel with a fire to keep them warm. the shrouded vision in the clouds and the fog of the buildings from which the shots came, and the pictures, the photographs of those who lost their lives, of the people who put themselves on the line for the future of ukraine. it was deeply moving to walk in to a group of ukrainians spontaneously gathered there and to listen to them, so listen to their pleas of passion for the
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right not to go back to life as it was under former president yanukovich. one woman who pleadingly said how poor they were, how the rich lived well and how those in power took the money and how they were left behind. and particularly, one man who told me that he had recently traveled to australia and he had come back here but he came back determined to be able to live as he had seen other people live in other parts of the world. so it was very moving and it gave me a deep personal sense of how closely linked the people of ukraine are to not just americans but to people all across the world who today are asking for their rights, asking for the privilege to be able to live, defining their own nation, defining their futures. that's what this is about.
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the united states extends our deepest condolences to those whose grief is still very fresh and those who lost loved ones, who bravely battled against snipers on rooftops and people armed against them with weapons they never dreamt of having. these brave ukrainians took to the streets in order to stand peacefully against tyranny and to demand democracy. so instead, they were met with snipers who picked them off one after the other as people of courage, notwithstanding the bullets, went out to get them, drag them to safety, give them comfort, expose themselves. they raised their voices for dignity and for freedom. but what they stood for so bravely, i say with full
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conviction, will never be stolen by bullets or by invasions. it cannot be silenced by thugs from rooftops. it is universal, it's unmistakable, it is called freedom. so today in another part of this country we're in a new phase of the struggle for freedom and the united states reaffirms our commitment to ukraine's sovereignty and territorial integrity, according to international law. we condemn the russian federation's act of aggression and we have throughout this moment evidence of great transformation taking place and in that transformation we will stand with the people of ukraine. today ukrainians are demanding a government with a consent of the
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people. and i have to say that we all greatly admire the restraint that the transitional government has shown as it makes this transition. they have shown restraint, despite an invasion of ukrainian homeland and a russian government that has chosen aggression and intimidation as a first resort. the contrast really could not be clearer. determined ukrainians demonstrating strength through unity and a russian government out of excuses, hiding its hand behind falsehoods, intimidation, and provocations, in the hearts of ukrainians, in the eyes of the world, there is nothing strong about what russia is
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doing. so it's time to set the record straight. the russian government would have you believe it was the opposition who failed to implement the february 21st agreement that called for a peaceful transition, ignoring the reality that it was yanukovich who, when history came calling, when his country was in need, when this city was the place where the action was, where the leaders of the nation were gathered in order to decide the future, he broke his obligation to sign that agreement and he fled into the night with his possessions, destroying papers behind him. he abandoned his people and eventually his country. the russian government would have you believe that the ukraine government somehow is illegitimate or led by extremists, ignoring the reality that the rada representing the
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people of ukraine, the elected representatives of the people of ukraine, they overwhelmingly approved the new government even with members of yanukovich's party deserting him and voting overwhelmingly in order to approve this new government. it was thanks in parts to the votes from yanukovich's own party that the future of ukraine changed. and today the rada is the most representative institution in ukraine. the russian government would also have you believe that the calm and friendly streets, one of which i walked down but many of cwhich i just drove through, that many somehow these streets of kiev are actually dangerous, ignoring the reality that there has been no surge in crime, no
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surge in looting, no political retribution here. the russian government would have you believe against all the evidence that there have been massed infections to russia or mass attacks on churches in eastern ukraine. that hasn't happened, either. they would have you believe that ethnic russians and russian bases are threatened. they would have you believe that kiev is trying to destabilize or that russian actions are illegal because crimean leaders invited intervention. as everybody knows, the soldiers in crimea at the instruction of their government have stood their ground but never fired a shot, never issued one provocation, have been surrounded by an invading group of troops, and have seen an
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individual who got 3% of the vote installed as the so-called leader by the russians. they would have you believe that kiev is trying to destabilize crimear or they invited that. not a single piece of credible evidence support s any one of these claims, none. and the larger point is really this. it is diplomacy and respect for sovereignty, not unilateral force that can best solve disputes like this in the 21st century. president obama and i want to make it clear to russia and to everybody in the world that we are not seeking confrontation.
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there's a better way for russia to pursue its legitimate interest in ukraine. if you were legitimately worried about some of your is it september citizens, then go to the government, talk to them about it, go to the u.n., raise the issue in the security council, go to the osce, raise it at one of the human rights organizations. there are countless outlets that an organized, structured, decent world has struggled to put together to resolve these differences so we don't see a nation unilaterally invade another nation. there's a better way for russia to pursue its legitimate interest in ukraine. russia can choose to comply with international law and honor its xhisme xhismentes under the helsenki
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final act. if it wants to procession russians which it purports to and if it were threatened we would support efforts to protect them, as would i am told the government of ukraine. but if they want to do that, russia could work with the legitimate government of ukraine, which it has pledged to do. it cannot only permit but must encourage international monitors to deploy throughout ukraine. these are the people who can actually identify legitimate threats and we are asking, together with government of ukraine, together with european communities, for large numbers of observers to be able to come in here and monitor the situation and be the arbiters of truth versus fiction. russia, if it wanted to help deescalate this situation, could return its troops to the
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barracks, live by the 1997 base agreement, and de-escalate rather than expand their invasion. now, we would prefer that. i come here today at the instruction of president obama to make it absolutely clear the united states of america would prefer to see this de-escalated. we would prefer to see this managed through the structures of legal institutions, international institutions that we've worked many years in order to be able to deal with this kind of crisis. but if russia does not choose to de-escalate, if it is not willing to work directly with the government of ukraine as we hope they will be, then our partners will have absolutely no choice but to join us to continue to expand upon steps we have taken in recent days in order to isolate russia
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politically, diplomatically, and economically. i would emphasize to the leaders of russia, this is not something we are seeking to do, this is something russia's choices may force us to do. so far we have suspended participation in the preparations for the sochi g-8 summit. we have suspended military contacts. and we have suspended bilateral economic dialogue. we are prepared to take further steps if russia does not return its forces to the barracks and engage in a legitimate policy of deescalation. at the same time, the united states and its partners, our partners, will support ukraine. we will support it as it takes difficult steps to deal with its economy. and i appreciate the meeting that i just had with the acting
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president and the prime minister and other leaders as we discussed how to strengthen the economy and move rapidly towards free, fair, open elections that can take place very shortly. we are working closely and will continue to work closely with the imf team and with international partners in order to develop an assistance package to help ukraine restore financial stability in the short run and the economy in the long run. i'm pleased to say that this package includes an immediate $1 billion in a loan guaranteed to support ukraine's recovery and we are currently working with the treasury department of the united states and with others to layout a broader, more comprehensive plan. we will provide the best expertise available to help ukraine's economy and financial institutions repair themselves
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and to work towards these free, fair, fast, inclusive elections. we're also working with the interim government to help combat corruption and to recover stolen assets. and we are helping ukraine to cope with russia's politically motivated trade practices, whether it's manipulating the energy supply or banning the best chocolates made in ukraine. the fact is, this is is the 21st century. and we should not see nations step backwards to behave in 19th or 20th century fashion. there are ways to resolve these differences. great nations choose to do that appropriately. the fact is that we believe that there are a set of options available to russia and to all
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of us that could move us down a road, if appropriate diplomacy, appropriate diplomatic engagement. we invite russia to come to that table. we particularly invite russia to engage directly with the government of ukraine because i am confident they are prepared to help work through these issues in a thoughtful way. i'm very proud to be here in ukraine. like so many americans and other people around the world, we've watched with extraordinary awe the power of individuals unarmed, except with ideas. people with beliefs and principles and values who have reached for freedom, for equ equality, for opportunity. there's nothing more important in this world. that is what drives change in so many parts of the world today. it's really partly why the world is in such a state of
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transformation in so many different places at the same time. we're all connected. we all understand what other people are doing and the choices they have and the lives they get to lead. and all over the world young people are saying we do not want to be deprived of those opportunities. that's what this is about. and it is about all those who value democracy and who support the opportunity for this country to join the legions of others who want to practice it. the united states will stand by the ukrainian people as they build the strong, sovereign, and democratic country that they deserve and that their countrymen and women just so recently gave their lives in extraordinarily courageous acts in order to ensure for the future. we must all step up and answer their call. i'll be happy to take some questions. >> andrea mitchell from nbc.
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there's a microphone coming. >> thank you very much. mr. secretary, u.s. officials have been saying that vladimir putin will be isolated by his actions. yet today he seemed defiant, speaking for an hour, taking questions. he said, among other things, that russia reserves the right to take any action to use any means, obviously military means. he described events here as an unconstitution unconstitutional coup. he denied any troops in crimea. he is saying -- >> he denied there were troops in crimea? >> yes, he did. he also blamed the crisis on the united states saying that the united states was acting as though we were conducting an experiment across the ocean on lab animals, on rats here. and he showed no sign of being ready to step down -- step down or deescalate the military
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presence in crimea. there have been fire -- shots fired today. there's the presence reported of naval -- of russian ships along ukraine and crimea. so with all of that -- >> i just want to interrupt briefly here. the secretary of state answering andrea mitchell's question. the president is answering questions about russia as well. >> -- for a package that helps to stabilize ukraine's economy. and today we announced a significant package of our own to support the ukraine's economy and also to provide them with the technical assistance that they need. so it includes a planned loan guarantee package of $1 billion. it provides immediate technical expertise to ukraine to repair its economy and, importantly, it provides for assistance to help ukraine plan for elections that are going to be coming up very
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soon. as i said yesterday, it is important that congress stand with us. i don't doubt the bipartisan concern that's been expressed about the situation in ukraine. there is something immediately congress can do to help us and that is to help finance the economic package that can stabilize the economy in ukraine, help to make sure that fair and free elections take place very soon and as a consequence, helps to deescalate the crisis. in the meantime, we're consu consulting with our international allies across the board, together the international community has condemned russia's violation of the territorial integrity and sovereignty of ukraine. we've condemned their intervention in crimea. and we are calling for a deescalation of the situation and international monitors that can go into the country right away. and above all, we believe that the ukrainian people should be
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able to decide their own future, which is why the world should be focused on helping them stabilize the situation economically and move towards the fair and free elections that are currently scheduled to take place in may. there have been some reports that president putin is pauszing for a moment and reflecting on what's happened. i think that we've all seen that from the perspective of the european union, the united states, allies like canada and japan and allies and friends and partners around the world, there is a strong belief that russia's actions is violating international law. i know president putin seems to have a different set of lawyers, making a different set of interpretations. but i don't think that's fooling anybody. i think everybody recognizes that, although russia has ledge
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mate interests in what happens in a neighboring state that does not give it a right to use force as a means of exerting influence inside of that state. we have said that if, in fact, there is any evidence out there that russian speakers or russian natives or russian nationals are in any way being threatened, there are ways of dealing with that through international mechanisms. and we're prepared to make sure that the rights of all ukrainians are upheld and, in fact, in conversations that we've had with the government in kiev, they have been more than willing to work with the international community and with russia to provide such assurances. so the fact that we are still seeing soldiers out of their barracks in crimea is an indication to which what's happening there is not based on
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actual concern for russian nationals or russian speakers inside of ukraine but is based on russia seeking through force to exert influence on a neighboring country. that is not how international law is supposed to operate. i would also note just, you know, the way that some of this has been reported, that suggestion somehow that the russian actions have been clever or strategically. i actually think this has not been a sign of strength but, rather, is a reflection that countries near russia have deep concerns and suspicions about this kind of meddling and if anything it will push many countries further away from russia. there is the ability for ukraine to be a friend of the west and a friend of russia's, as long as
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none of us are inside of ukraine trying to meddle and intervene, certainly not militarily, with decisions that properly belong to the ukrainian people. that's the principle that john kerry is going to be speaking to during his visit. i'll be making additional calls today to our key foreign partners and i suspect i'll be doing that all week and in through the weekend. as i indicated yesterday, you know, the course of history is for people to want to be free to make their own decisions at their own futures. and the international community, i think, is unified in believing that it is not the role of an outside force where there's been no evidence of serious violence, where there's been no rational under international law to
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intervene and people trying to determine their own destiny. so we stand on the side of history that, i think, more and more people around the world deeply believe in, the principle that a sovereign people, an independent people, are able to make their own decisions about their own lives. and mr. putin can throw a lot of words out there but the facts on the ground indicate that right now he's not abiding by that principle. there is still the opportunity for russia to do so. working with the international community to help stabilize the situation. and we've sent a clear message that we are prepared to work with anybody if their genuine interest is making sure that ukraine is able to govern itself. and as i indicated before and something that i think has not been emphasized enough, they are currently scheduled to have elections in may.
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and everybody in the international community should be invested in making sure that the economic deterioration that's happened in ukraine stops, but also that these elections proceed in a fair and free way in which all ukrainians, including russian speakers inside of ukraine, are able to express their choice of who should lead them. and if we have a strong robust, legitimate election, then there shouldn't be any question as to whether the ukrainian people are govern themselves without the kinds of outside interference that we see russia exerting. all right? thank you very much, everybody. >> that is the president and the secretary of state running essential dual track q and a nasdaq realtime condemning russia's acts of aggression, defending tactic of the opposition, scolding yanukovich. but as secretary of state said,
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the united states is not seeking confrontati confrontation. nbc's ian williams is in live in kiev with reaction to what we just listened to. ian, good evening to you. >> good evening, carl. those words will certainly be welcomed here. john kerry's trip to kiev was billed as a gesture of support for the interim government here. clearly, the words have been robust and it was a pretty comprehensive rebuttal of what we heard earlier from voladimir putin who said that what had happened here was an unconstitutional coup, illegitimate dpoft. i think the words we've seen today from kerry, from the president will be well received here. but as they both pointed out, there was far more now that needed to be done because of the direct economic situation here in partnership with the imf that's in town today and also
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with european partners who have been a little bit more reticent in coming forward with sanction or tough actions against the russians, carl. >> thank you for that color. good to get your reaction there on the ground. i appreciate that. i'm going to john harwood in washington this morning. john, the secretary of state seemed surprised at andrea mitchell's telling him that putin was denying the presence of russian troops in crimea. but aside from that, what was the purpose of his speech? >> well, he was trying to express support with the new government as ian was just saying. he used sharper language than the president did. he talked essentially said that the russian government was lying. when the president spoke, he gave a little bit more of the err of someone who understood that the situation may be turning a little bit in a direction more favorable to the united states. he talked about putin as having a different set of lawyers than the united states.
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he said there was indications of vladimir putin was taking a pause, reconsidering what his next steps are going to be. that's reflected in the decision to pull some of those troops back to their original bases. some of those russian troops. so i think the president wouas trying to re-enforce john kerry's message but also deliver it in a way that might be consistent with deescalating tensions have the financial markets have indicated today. >> all right. thanks for that, john. i know you have a busy day on tap. the secretary of state is just wrapping up his q and a. 30 minutes on the ukraine with a whole host of media. meanwhile, the markets have been holding up while he and the president were speaking. we have 57 new highs on the s&p. five new highs on the dow. still rallying on the optimism of the situation in ukraine. bob pisani, what are you watching today on the floor? >> it's been steady as she goes. stocks are near their session highs, as secretary kerry has been speaking just right straight across there at the highs here. it is a remarkably broad rally. 10-1 advancing to declining
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stocks and everything is moving. just take a look. when you see consumer staples which are defensive names, moving up the same as, say, consumer discretionary names. industrialing moving up as well as health care. cyclical versus defensive names. broad rally overall. look at the vix. the volatility index spiked up. not a big move but moved right back down to where it was in the prior days. historic highs across the board. on the mid cap, and the russell 2000. when the market moves this quickly and hits new highs quickly, traders are forced to move in. i want to ipoint out we've had activity in the russell 2000 etf, those people getting back in a big way. back to you. >> thanks for that, bob. always watching what's going on on the floor. meantime, rick santelli in chicago. rick? >> thank you. i'd like to welcome our guest, former senator alan simpson. thank you for taking the time on the phone today, sir. >> yes, indeed.
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you've got a busy day out there with ukraine and everything else. but here i am in the whiles of wyoming, 40 degrees and lovely. >> well, let's get hit with the first topic. we're going to see the president's budget today. many are saying it's the end of austerity. do you think that we've come far since simpson-bowles, implemented policies that you think are going to work or do you think we've fallen short? >> oh, no, i think we realize that the deficit is going down. who wouldn't hope for that? we hope for it. it's working. but any time you look at what they're doing, it's all short term. the stuff that's going to eat our lunch is 10,000 people a day turning 65. you've got a system that was set up of social security that you won't even address the insolvency of it for 75 years. health care is on automatic pilot. forget what you call it. it's time to deal with the long-term stuff before interest goes from where it is now to back to historical heights and
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then watch people grab their socks and run for blocks. >> is there anything you think can be done considering that it probably won't be implemented until after the november 2014 midterms? >> anything that will be done will be done down the road. that's what's wrong with the health care plan. whatever it is is all the correction process is down the road, way ahead. and it's like a dock fix. you're going to do another dock fix and they will run in. you're going to do anything. whatever you do, whether it's tort reform or real estate or whatever is done, the groups will organize and say these guys are nuts. this is the end of america. whatever it is. and you've got to go into the tax code and start ripping those things out of there. and every one of them had a constituency to run a front page ad and tear your shorts off. >> well, you know, senator, the final issue here, how would you get middle class voters to go
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along with programs to fix some of these entitlements when many of them, of course, can't find work, benefits are running out. what is the answer here to get some of the middle class to understand sack crifice when th believe they've been sacrifi sacrificing? how do we put this over the goal line? >> don't ask me. we put in our plo proposal, never touched ssi or anything the vulnerable. if people read a 67-page report instead of running around like chickens with their heads chopped off you will see how we say it needs to be done. let it go. play the short -- play small ball and 10, 15 years from now your country will be sucking canal t water. that's the way it is. it's called the debt. and it's $17.3 trillion headed for 20. at some point the people who have loaned us 20, 30 trillion bucks will say you've got a
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dysfunctional government and a congress that doesn't work and we want more money for our money and -- >> i have to run. coming up -- >> the little guy. >> i have to run, senator. thank you, thank you for those inspiring words. not sure if they're going to fall on deaf ears or not. got to go to the next show coming up, sir. sorry. >> thank you, rick. rick santelli in chicago. with that we will toss it to scott wapner. >> thanks so much. big day shaping up on the street. i know you've been following. you guys have a great rest of the day. here's what we're following at this hour. moscow and your money as tensions ease slightly in ukraine, is it safe to buy stocks? one of our guests has three names he says are bargains amade the worry. abercrombie gets an upgrade in our call of the day but is it really on the comeback trail? touchdown or turnover? former nfl player philip buchanan is here pitching his new business idea to the

Squawk on the Street
CNBC March 4, 2014 9:00am-12:01pm EST

Opening bell market action.

TOPIC FREQUENCY Russia 52, Us 23, Crimea 16, U.s. 16, John Kerry 14, S&p 12, United States 11, Carl 9, Imf 9, At&t 7, Simon 6, Moscow 6, Steve Sadove 6, Kerry 5, Rick Santelli 5, Steve 5, San Francisco 5, Blackstone 5, Espn 4, Phil Lebeau 4
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